Market Plus with Ted Siefried and Matt Bennett

Paul Yeager: Welcome back to the table for the Friday, October 4th, 2024 installment of Market Plus Matt Bennett, Ted Seifried here again, having to suffer through my ridiculousness between takes. One of those things, Ted. Yes, I'm full of useless knowledge, but doesn't it make life more fun when I can, I can at least make you smile?

Ted Seifried: In small bits? Yes.

Paul Yeager: Small bits. Yeah, yeah, we don't need to do it forever. One of the things I know is Matt’s a farmer. Matt's been farming this week. You were busy last night harvesting. How are things looking in Illinois?

Matt Bennett: Yeah. And so we got a little later start than normal, which, you know, a lot of folks did. Things didn't dry down as much as what we thought we would, even though we had a, you know, fairly dry August and warm, I don't know, we started a little late and then we had two rains that kind of pushed us out. But the thing is, a lot of folks say, I wish I had that rain. And why is that? You know, you talk to folks in parts of Iowa that haven't gotten the rain and they're cutting 8 - 9% beans. It's tough because they're cutting 8 - 9% beans. Got leaves on them, you know. So we have the same thing. We've got some from this hurricane that came up, just remnants of it. We went from cutting 9% beans to cutting 12.5 to 13.5% beans. It was actually a thing of beauty for us. It kicked us out of the field. Absolutely. But, you know, you're sitting here on October 4th and typically we’re two thirds or better done in our part of the world. Some folks are banging on the door. We're maybe a third done right now, but you've got a two week window, it looks like of just beautiful harvest weather. We talked about it a little bit earlier. I expect a massive, massive weekend as far as soybean harvest is concerned. Some corn. But I mean, the beans are ready in so many different places. So I think there's going to be a lot going on here if things go well for us. I think, you know, by the 20th, 25th we'll be able to wrap things up. But, you know, it's going to take good weather.

Paul Yeager: So Gary, in Wisconsin has a question for you. And then you get to answer it as well. But does limited farmer selling on this last rally mean the crop is not as good as expected, or the price is still below the cost of production?

Matt Bennett: Okay. So limited farmer selling, in my opinion, doesn't always have a whole lot to do with price. When we rally, sometimes we just get bullish is what we do unfortunately. You know. But you know, does it have to do with the crop being smaller? I don't believe so. I really don't I mean, when you look over the course of time over the last several months, it's been well known that the farmer has been very reluctant to step in and reward the market. You know, obviously we're going down, down, down. Now, you rally $0.40 and $0.50 and corn, you rally at dollar and plus on soybeans. Why are they reluctant? That's a wonderful question. But I don't think it means the crop is smaller. When you look at early yields they look phenomenal. I would offer a word of caution. We talked about this a little bit. Usually your first stuff is what you're going to harvest first is going to be your best stuff, right. First of all, second of all, a dryer biased August leads me to believe some of the later harvest results won't be quite as good as early. But the early has been so good that I think it could carry us to awfully big crops.

Paul Yeager: Is that what you've heard?

Ted Seifried: Yeah. Pretty much. And, you know, farmers don't like to sell a rally because, you know, if I sell it, why would I sell today if it's going to be higher tomorrow? Right. So really, it takes a break in the market to get bushels to move. And, you know, I say I'm just full of adages today. The carrot versus the stick, right? The market dangles the carrot to try to get bushels. And when that doesn't work, then comes out the stick. And we've had the carrot. At what point does the stick come out? I don't know. And is the crop better or worse? You know, I think what I'm hearing is that it's worse than what we were thinking in maybe the second week of August, but it's better than what we were thinking in the second or third week of September. I think there's, I've heard a lot of pleasantly surprised specifically for corn, but even for soybeans as well, exception being maybe South Dakota. Just on the way here was, hearing some some horror stories, I guess. But, yeah, I don't know. You know, as far as where the national average yield concerns, I'm going to say that we probably, we walked the crops back, from where they could have been and what that potential could have been. But, but, the question really is where would that potential have really been? Could we have seen a 186 national average yield in corn? Could we have seen a 55 national average yield in soybeans? I think these numbers are within the realm of possibility. Now, they're not there anymore. But it doesn't mean that that corn yield has to drop to 180 or 179. I think that's well too low. Does it mean that soybean yield has to drop below a 52? I don't think so either. We'll see what the USDA has to say that on that next Friday. We're really setting up for one of the most anticipated reports, that I can think of in recent history on this October 11th report. But I worry that some people are going to be surprised or potentially could be surprised if the USDA doesn't drop yields fairly aggressively.

Paul Yeager: Shamus in Iowa wants to ask you about your, you know, you talk about walking fields all bit, but he says, Ted, you said the crop is going to finish good, but everyone is lowering yields. Where do you think the crop will finish? And will you admit that you shouldn't count flat pods on the pro farmer tour?

Ted Seifried: Okay. I answered a lot of that question.

Paul Yeager: Yes, you did

Ted Seifried: You know, it didn't finish as well as it could have, but again, what was the peak potential? You know, when things looked at its best, I think the potential was higher than where the USDA has ever printed on what their, what their current yields are, which are their highest that they've had, counting flat pods, you know, the thing about crop tour is that you're counting the potential. You know, when you're in the third week of August, really, anything can happen. And I mean, predicting the future, predicting the future of markets, predicting the future of weather, predicting the future is tough, right? You never really know what's going to happen. So you have to count the pods because you're counting the potential. And I'm also going to say, look, this is going to bring back to my genetic genetics conversation. We had the big ramp up in genetics and corn in the 20 teens, right, where corn genetics just got really, really good. You saw evidence of that last year when it got hot and dry, at the end of the year also. But we still ended up with a pretty darn good, corn yield. The bean genetics, I think, are the ones that have really come on strong lately. I think we kind of proved that out last year. This could be the year where we really prove that out. These plants, if they are big, green, leafy plants, they do everything they can to sacrifice the moisture in the plant, to push it in, to fill out those pods. And if the pod counts there, I think likely you're going to have a pretty decent yield. Even if you do have a warmer dryer, finish.

Paul Yeager: It's like a an average. It's going to, it's usually going to average out. It's not going to be the extremes.

Ted Seifried: Right.

Paul Yeager: Is what you're saying.

Ted Seifried: Well I mean you can have extremes. You can have perfect. You can have completely imperfect. I think what we had this year wasn't absolutely perfect, but it was closer to the side of perfect than it was imperfect.

Paul Yeager: I think you're right. And I think that Charlie in Ohio has a question for Matt. Should we start looking at sales for the ‘26 crop as a start, or hold off and just focus on ’25?

Matt Bennett: Well, I think there was someone else that was asking about a year prior. Maybe. So sometimes we got to at least focus on where we're at. Now ‘26 ,the, here's the thing, when I look at beans, I do think that it might not be a bad idea to hedge off some risk. Whenever I look out to 26, a lot can happen between now and then. So I'm talking small percentages. But the bottom line for corn, in my opinion, is that you do have a bit of a developing story as far as demand is concerned. It, we're not super bullish, and I can't get super bullish if beans are going to act as an anchor. And I think it's a very real possibility. The beans do act as an anchor. So I don't know that I'm getting super aggressive there. Certainly not with corn. You know, to go back to what Ted was saying just a little bit, if I can go there, you know, I think whatever comes of these beans, the early yields were just flat out incredible. And so what you did this year, you had a pretty wet July, no doubt about it. You built this bean plant that was just loaded with pods. You put in another top, so to speak. You know, people say beans are putting their top in. And so you've got all these nodes, all of these pods. And all of a sudden you're thinking, well, this crop is not going to be as good because we had a drier August. Most people went into August with a full soil moisture profile. Okay. So when they go out in the field, I've been on the tour before. You give a condition score as well, as far as what the ground looks like, you know, if there's not cracks in the ground and I've got 100 pods on a plant, good lord, you know, I'm thinking this is going to be one heck of a big bean crop. So when you have the most pods you've ever seen on an overall basis, of course you're going to think it's going to be a big, bean crop. My personal opinion, though, is that the verdict out as far as May beans are concerned, I, I think the April beans are just flat out unbelievable for most people. You talk to people, most people are happy with beans, but I think there's been some disappointed versus versus expectations. Why? Because they thought they had 100 bushel beans in the “I” states for some people, they really did. You know, the potential was probably there, but still 85 or 80 bushel beans, 75 bushel beans. Those are good beans. I think May planted beans are going to take a little bit of the shine off, so to speak.

Ted Seifried: Yeah, but it's interesting how expectations change, right? Because the expectations in the second or third week of August were as high as they've ever been, higher than they've ever been. Right. But then those expectations came crashing down in the middle towards the end of September. And then I've got a lot of guys that are going in and and again, you know, the earlier planted stuff is definitely really going to be better than the later planted. But those expectations got too high. Then they got too low and it ended up being somewhere in the middle. Right. So, you know, I don't know if you take that and apply that to the USDA’s national average yield. I mean, at the end of September, I think there were people talking, well, 51, now, you've had, you know, private surveys coming out and actually raising yields. So the jury's still very much out on on yield, but I think it'd maybe it's not the peak potential, but I still think it's pretty good.

Matt Bennett: Well, I think changing expectations or raising them happens in the markets as well.

Ted Seifried: Absolutely.

Matt Bennett: Look at what we've had here lately. You know Paul, I had people tell me, hey, I would step in and maybe hedge off some risk at $11 and Nov. ‘25 beans, you make the phone call, you say, hey, what do you think about selling some Nov ’25 beans at $11? Where they at? $11. You said you'd be willing to sell. Yeah, well, I don't know.

Paul Yeager: Can I play the tape back?

Matt Bennett: I’m going to wait till tomorrow right? Because the fear of missing out. I mean, that's what it boils down to, because I'm going to at least throw one adage in there.

Ted Seifried: Yeah. Thank you.

Paul Yeager: So let's see. That's Ted four, Matt one.

Matt Bennett: I’ve got some making up to do.

Paul Yeager: Lastly, is it still too early, Matt, to have a headline for this 2024 crop year?

Matt Bennett: I mean, a headline I think the headline already is that this is a massive corn crop compared to before. I know people are going to say, gee whiz, how do you know it's not in the bin yet? All I'm saying is, is that when you see folks say, hey, we've got our first 400 acres harvested and its averaging 265, the best we've ever seen before is 235 or 240. That's a big crop. I mean, that's a really big crop. And so to me, the headline has been that you've got this massive crop with big demand is all of a sudden chewing in to what we thought was going to be a carryout that we couldn't chew into. You know, I mean, bottom line is this is, potentially going to be a story that's not near as burdensome as what it was. And you just raised the biggest crop we've ever seen as far as yields are concerned.

Paul Yeager: You have a headline?

Ted Seifried: You're not supposed to say those numbers.

Paul Yeager: Yeah, I was going to say. You made him shake. I don't know if you saw that.

Ted Seifried: Yeah, no. No.

Matt Bennett: Excuse me. Retract.

Ted Seifried: No yield tweets. Hashtag 24. You know. Yeah. Corn demand. You go back to the USDA’s outlook form back in February. And every report since then we've either seen, a lower carryover or unchanged carryover, but it's been an improving outlook for corn. Now, it's not quite reached an area where we can say it's overly bullish. But as I was saying in the regular program, I think we're at a point where corn needs to buy acres. Now, soybeans need to lose acres. So it is, you know, is it, soybeans lower and corn stay the same? I don't think so. I think corn needs to get to a price level where we feel comfortable that we're going to cover our costs in order to get the additional acreage. So I can see a corn recovery going into the end of the calendar year going into spring. But also, I do think there's a lot of bushels that need to get sold before we can get to that point. So in the short term, I worry that there's more downside potential. I'm worried that it could surprise some people after the rally that we just had. In the long term, though, I do think corn is the one that has that potential for upside.

Paul Yeager: Ted Seifried. So good to see you.

Ted Seifried: Always a pleasure.

Paul Yeager: Thank you so much for your insight.

Ted Seifried: Thanks, Paul.

Paul Yeager: Matt. Thanks. Oh, sorry. Yes, Matt. No, thank you for coming. Appreciate it. Thanks for taking a break. I hope you're not going to be in too much trouble when you get home for skipping a day of work.

Matt Bennett: I won’t be in too much trouble. Well, it'll be there when I get there.

Paul Yeager: Yeah, it doesn't go away. It's still there. All right, Matt Bennett, thank you so much. Thank you very much, everybody, for watching as well. Next week we are going to talk about the increasing cost to fight a decades old disease in the hog industry. We'll also have the commodity market analysis of Naomi Blohm. And also I want to remind you to subscribe to our Market Insider newsletter on our website. Thank you for joining us. Have a great week.

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